MSME Public Procurement Policy

The government of India has introduced a Public Procurement Policy for Micro and Small Enterprises Order, 2012 which was notified under MSMED Act 2006 effective from April 1, 2012.Under this policy, PSUs and Central Government Ministries are expected to procure at least 20% of their total annual value of goods or services from MSEs

The government of India has introduced a Public Procurement Policy for Micro and Small Enterprises Order, 2012 which was notified under MSMED Act 2006 effective from April 1, 2012.Under this policy, PSUs and Central Government Ministries are expected to procure at least 20% of their total annual value of goods or services from MSEs which became mandatory from April 1, 2015. Further 4% of those 20% are to be procured from MSEs owned by enterprises belonging to SCs and STs. The objective of this policy is to promote MSEs by enhancing their competitiveness through

Increased participation by MSEs in Government purchases
Encouraging linkages between MSEs and large enterprises;
Increased share of supplies of MSEs to Government, Ministries/Departments, their aided institutions and PSUs.

 

PHDCCI Role:

PHDCCI facilitates its MSME member units to participate in the above MSME procurement policy by way of following:

Registration with government authorities including NSIC/DICs.
Registration with GeM for supplying to government.
Providing information about tenders and procurement requirements of various government departments.
Helping MSMis to participate in such tenders.

 

GeM

As we all know, the world over the public sector is undergoing a “paradigm shift” moving away from the traditional role of inflexible, control-based public institutions that are procedure oriented towards flexible public institutions that are transparent, accountable to citizens and produce results.

In ahead with this move, GeM is an initiative taken and implemented by the Government of India with the help of an idea introduced by our PM Mr. Narendra Modi.

It provides a one stop Government e Market place to facilitate online procurement of common use Goods & Services required by various Government Departments / Organizations / PSUs.

It aims to enhance transparency, efficiency and speed in public procurement. It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users, achieve the best value for their money.

GeM SPV provides an end-to-end online Marketplace for Central and State Government Ministries / Departments, Central & State Public Undertakings (CPSUs & SPSUs), Autonomous institutions and Local bodies, for procurement of common use goods & services in transparent and efficient manner.

It helps to reduce the time of procurement by bringing in complete transparency in the procurement process.

It helps in getting and making available both the buyers and suppliers , the products at right point of time, place , Price from Right Source with Right Quality and Quantity.

Continued use of GeM is likely to have a profound impact on not only the way the Government makes bulk purchases but also the underlying Governance function itself.

It currently has 2,64,072 Products , 22,789 Buyer Organisations , 1,06,551 Sellers and Service Providers , 1,812 Services etc.

Benefits

Right Product , No scope of adulteration
Time Saving and Hassle free reliable purchases
Complete Transparency in the entire process from identifying till attaining
Ease in procurement of different category of varied products on one platform
 

Objective

Increased participation by MSEs in Government purchases
Encouraging linkages between MSEs and large enterprises;
Increased share of supplies of MSEs to Government, Ministries/Departments, their aided institutions and PSUs.

 

MSME SAMADHAAN

The Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 contains provisions of Delayed Payment to Micro and Small Enterprise (MSEs). (Section 15- 24). State Governments to establish Micro and Small Enterprise Facilitation Council (MSEFC) for settlement of disputes on getting references/filing on Delayed payments. (Section 20 and 21)

Nature of assistance

MSEFC of the State after examining the case filed by MSE unit will issue directions to the buyer unit for payment of due amount along with interest as per the provisions under the MSMED Act 2006.

Who can apply

Any Micro or small enterprise having valid Udyog Aadhar(UAM) can apply.

Salient Features

The buyer is liable to pay compound interest with the monthly rests to the supplier on the amount at the three times of the bank rate notified by RBI in case he does not make payment to the supplier for his supplies of goods or services within 45 days of the acceptance of the goods/service rendered. (Section 16)

State Governments to notify
Rules of MSEFC and
Constitution of MSEFC.
 

All States/UTs have notified Authority for Filing Entrepreneur's Memorandum, 33 States/UTs (i.e. except Arunachal Pradesh, Assam and Manipur) have Notified rules of MSEFC and all the 36 States/UTs have constituted MSEFCs, as per provisions laid down under MSMED Act 2006.

Every reference made to MSEFC shall be decided within a period of ninety days from the date of making such a reference as per provisions laid in the Act.

If the Appellant (not being the supplier) wants to file an appeal, no application for setting aside any decree or award by the MSEFC shall be entertained by any court unless the appellant (not being supplier) has deposited with it, the 75% of the award amount. (Section 19)

Implementation

The provisions under the Act are implemented by MSEFC chaired by Director of Industries of the State /UT having administrative control of the MSE units. State Government/UTs are requested to ensure that the MSE Facilitation Council hold meetings regularly and delayed payment cases are decided by the Councils within a period of 90 days as stipulated in the MSMED Act, 2006.

MSME Samadhaan Portal - Ease of filing application under MSEFC, an Initiative from Office of DC(MSME), M/o MSME

Office of DC(MSME has taken an initiative for filing online application by the supplier MSE unit against the buyer of goods/services before the concerned MSEFC of his/her State/UT. These will be viewed by MSEFC Council for their actions. These will be also visible to Concerned Central Ministries, Departments, CPSEs, State Government, etc for pro-active actions.

TReDS

The scheme for setting up and operating the institutional mechanism for facilitating the financing of trade receivables of MSMEs from corporate and other buyers, including Government Departments and Public Sector Undertakings (PSUs), through multiple financiers

The TReDS facilitates the discounting of both invoices as well as bills of exchange. Further, as the underlying entities are the same (MSMEs and corporate and other buyers, including Government Departments and PSUs), the TReDS could deal with both receivables factoring as well as reverse factoring so that higher transaction volumes come into the system and facilitate better pricing.

The transactions processed under TReDS will be “without recourse” to the MSMEs.

Objective:

The objective of the TReDS is to facilitate financing of invoices / bills of MSMEs drawn on corporate and other buyers, including the Government Departments and PSUs, by way of discounting by financiers.

https://gem.gov.in/

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